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Temasek Holdings off to another spending spree on mines in Africa and Mongolia

Watchman

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Temasek Holdings off to another spending spree on mines in Africa and Mongolia

March 23, 2010 by admin

Temasek Holdings is fast becoming the “private Asian investment vehicle” which it aspires itself to be though it is funded in one way or another by Singapore taxpayers.

After embarrassing flops in Australia (ABC learning), Thailand (Shin Corp) and USA (Merill Lynch), Temasek Holdings is now setting sights further on the mines in Africa and Mongolia.

According to a Bloomberg report today, Temasek will working together with “strategic” partners to seek opportunities in Africa and Mongolia.

Temasek’s managing director of investments Nagi Hamiyeh told Bloomberg:

“We’re fairly bullish about investing in mining. We are opportunistic and whenever we see opportunity, we will make sure we invest.”

Temasek has indeed made many “opportunistic” investments in recent years under the charge of its CEO Ho Ching who is incidentally the wife of Singapore Prime Minister Lee Hsien Loong and daughter-in-law of PAP strongman Lee Kuan Yew.

Ho graduated with a Bachelor in Engineering from the National University of Singapore and went on to obtain a Master’s degree from Stanford University.

On January 23, 2006, former Thai Prime Minister Thakshin Shinawatra’s family sold its 49.6 percent stake in Shin Corp to nominees of Temasek Holdings, triggering massive protests from the Thais and precipitating a military coup eventually which led to his ouster.

Fortune magazine remarked later in the year that Ho Ching had made “a spectacular misjudgment” in the purchase of Shin Corp shares. Since then, Shin shares have fallen 43% since the deal was signed.

Between 2007 and 2008, Temasek Holdings paid some S$600 million dollars in Australia childcare group ABC Learning only to see it collapsed dramatically a year later. A charity Mission Australia ended up paying a token $1 each for several of the 29 ABC Learning centres owned by Temasek.

Temasek’s greatest “long-term” investment flop came from the sale of its entire stake in Bank of America less than two years after purchasing its subsidiary Merrill Lynch.

David Faber from CNBC minced no words on Temasek’s whooping US$4.6 billion loss:

“A $4.6 billion loss on a $5.9 billion dollar investment. TPG lost $2 billion really quickly on Washington Mutual, but this one guys, is right up up there, as one of the worst investment during this period for one single investment fund.”

(Watch the video here)

Following a string of catastrophic losses, Ho was supposed to step down in February 2009 in favor of former BHP-Bilton CEO Chip Goodyear only to see the latter being squeezed out half a year later and Ho resuming her position due to “strategic differences”.

When quizzed by his own party MPs in Parliament on the exact reasons behind Goodyear’s sudden departure, Finance Minister Tharman said that it would not serve any “strategic purpose” to reveal the truth.

After suffering a 31 percent decline in its portfolio last year, Temasek is flexing its muscles for another “strategic long-term investment” again. Singaporeans better start praying hard that Temasek’s latest African adventure did not end up becoming another “strategic flop” generating “negative wealth” for the national reserves.
 
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